Radarstat-1 at the University of Saskatchewan in Saskatoon, Sask., in this 2004 file photo. This 10-metre antenna system is one of two used by the Canadian Space Agency (CSA) to monitor and control Radarsat-1, Canada's remote sensing satellite. (Photo by Kevin Van Paassen/ The Globe and Mail) | CP

Industry leaders are worried that cuts to the Canadian Space Agency announced in the recent budget might hurt critical programs.

There are fears of possible layoffs among employees, engineers and scientists who work at the space agency. They are expected to get a much clearer idea in the coming days of what the future holds.

Finance Minister Jim Flaherty's budget has called on the CSA to reduce spending — like a number of other departments and agencies — by 10 per cent over three years.

Budget documents indicate that the space agency has been told to cut $29.5 million by 2014-15, with smaller reduction targets in each of the two previous years.

Ron Holdway, the president of the Canadian Aeronautics and Space Institute, says the reductions will hurt "because the space agency hasn't had a pay raise, so to speak, in 12 years now."

The CSA's annual basic budget has generally remained around $300 million in recent years, before this budget. Holdway now says he expects there will be layoffs in the coming months, although it's not yet clear what projects they will affect.

"My understanding is that the government's direction to all departments has been that the focus needs to be on reducing overhead, rather than reducing operations," he said in an interview.

The CSA comes under the umbrella of Industry Canada. In an email, the department said federal employees and their unions would be informed about specific changes, "over the coming weeks and months."

It also suggested the cuts should come as no surprise to anyone paying attention since last year's federal election: "We received a strong mandate to manage the economy and we're working to deliver effective space programs in a cost effective way."

Holdway predicted the biggest impact from the budget would not be on existing programs, but he said the space agency is going to run out of money to start new projects in the next several years.

"They still have ongoing obligations to the (International) Space Station. They still have the RADARSAT Constellation Mission that's working its way through the system, and the James Webb Space Telescope is still ongoing," he said.

Meantime, MacDonald, Dettwiler and Associates Ltd. (MDA), which has been working on the RADARSAT satellite mission, has already indicated the federal budget will force it to lay off some staff.

But it hasn't said publicly how many workers might be affected.

MDA has developed space and satellite technology for many missions, including the Canadarm on the space station.

The Vancouver-area company said a preliminary assessment has suggested the budget doesn't include the money required to continue RADARSAT as it's currently envisioned.

The RADARSAT Constellation Mission is a three-satellite program that began in 2005; the CSA's website says the satellites are expected to be launched in 2014 and 2015.

But MDA says it's uncertain how the program will move forward and says it will have to discuss that with the space agency in the coming weeks.

In an email to The Canadian Press, MDA said the original launch dates were contingent on a January 2012 start date of production. It added that the production phase is worth $100 million a year of work for MDA and its subcontractors.

The satellites would be used for maritime surveillance, disaster management and monitoring of environmental change.

The Aerospace Industries Association of Canada (AIAC) said in a news release that the announced CSA budget cuts could impact programs that are critical government priorities.

The AIAC, which represents 400 aerospace companies across Canada, also added that it was concerned about the government's commitment to the International Space Station.

"Although we support the commitment, we are concerned that no new resources were allocated to the renewal," it said.

Industry Minister Christian Paradis recently announced that Canada was committed to the space station until 2020, the end of its current projected lifespan. But at the Feb. 29 announcement he also said that details of the arrangement still needed to be worked out.

The retirement of the U.S. space shuttle program in July 2011 has added another challenge for Canadian space companies.

Chuck Black, the treasurer of the Canadian Space Commerce Association, points out that firms like Neptec and COM DEV, a satellite equipment manufacturer, had sold parts to the shuttle fleet.

"There's only one Canadarm on the space station, rather than four, which were on the (station) and the three shuttles, so the revenue for supporting and maintaining those has certainly gone down," he said.

Ottawa-based Neptec made the laser-camera system that was used to inspect for damage on the exterior of the space orbiters.

"They don't sell those things anymore. They're all looking for new markets," Black said in an interview. "Right now, we've got no one to sell our stuff to."

But he downplayed some of the talk about corporate layoffs.

"This is just a negotiating ploy," Black said.

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Canada Budget 2012 Highlights

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The government is calling the budget a plan for Jobs, Growth and Long-term Prosperity.
"In this budget, our Government is looking ahead not only over the next few years but also over the next generation," said Finance Minister Jim Flaherty. "The reforms we present today are substantial, responsible and necessary. They will ensure that all across government we are focused on enabling and sustaining Canada's long-term economic growth."
However, while the budget does include many investments, it also make a number of cuts and changes that will save money. Here are some of the highlights.
(File photo by THE CANADIAN PRESS/Sean Kilpatrick)

The government is cutting spending by $5.2 billion on an ongoing basis, but it says it will not reach that total until 2014-2015.
Ottawa says 70 per cent of these savings will come from "operational efficiencies."
The planned reduction in spending is expected to result in the elimination of 19,200 public service jobs over a three-year period, 4.8 per cent of total federal employment. The government expects 7,200 of those positions to be eliminated through attrition. Six hundred executives positions are expected to be slashed.
Roughly $900 million will be spent making these job cuts, on things such as severance and benefits.
After 2014-2015, the public service cuts will save the federal government $5.23 billion per year.

The government is cutting the budget of Canada's national broadcaster by $115 million per year by 2014-2015. Currently, the CBC's total budget stands at roughly $1.1 billion per year, making for a cut of roughly 10 per cent.

The federal government is eliminating the penny.
But prices won't necessarily be rounded. The cent will continue to be the smallest unit of sale and non-cash transactions, such as spending done with credit cards, will continue to be settled to the nearest cent.
Existing pennies will continue to be legal tender for an indefinite period of time, but the Mint will stop producing new ones and distribution will cease in Fall 2012.
If no pennies are available for a cash transaction, it will be rounded to the nearest five cent increment after GST/HST.
The government says it currently costs 1.6 cent to manufacture a penny and that supplying them to the economy costs $11 million per year.
(CP photo)

The government says it has no intention of building any new prisons, despite the passage of the omnibus crime bill that some experts suggests will increase the number of people incarcerated. The Tories plan to slash $295 million from Corrections Canada by 2014-2015.
The RCMP will also receive major cuts, $195.2 million by 2014-2015.
But the government will spend $9.6 million over three years to combat counterfeiting.

The government is moving to alter the current process for the environmental assessment of resource-based projects.
It plans to move to one review for one project and to give these reviews a definite deadline. The change will affect the Northern Gateway pipeline. Additionally, the government wants to focus resources on reviewing the largest plans with the greatest potential for environmental impact. The federal government says it will do this while continuing to protect the environment.
The government says this change is aimed at simplifying a complex system of reviews that imposes costly delays and deters investment.
Canada's first near-urban national park will also be declared in the Rouge Valley in suburban Toronto.
Other highlights include:
- By 2014-2015, Environment Canada's budget will be reduced by $53.8 million per year.
- $50 million will be spent over two years to protect species at risk.

The government is increasing the eligibility age for receiving Old Age Security (OAS) and Guaranteed Income from 65 to 67.
The change will be made starting on April 1, 2023 and will be fully implemented by January 2029.
The government will also allow individuals to choose to defer payment for a maximum of five years starting in July 2013.
If a person does defer, they will receive a larger adjusted pension than if they had begun collecting at 65.
The government says it is making the changes primarily due to demographic shifts. The pending retirement of the Baby Boomers will increase the total cost of the program from $38 billion in 2011 to $108 billion in 2030.

The feds are planning to reduce Health Canada's budget by nearly $310 million per year by 2014-2015.
Health Canada and the Public Health Agency of Canada will consolidate many services, reducing what the government calls duplication, in order to achieve some of these savings.
The government will also eliminate Assisted Human Reproduction, a group involved in the study of potential uses for stem cells.
They also propose:
- Expanding GST/HST and income tax breaks for health care services.
- $51.2 million over two years to improve food safety.
(Alamy photo)

The government is making an investment of more than $1 billion in science and technology.
Canada currently lags behind other similar economies in terms of private sector investment in R&D and overall innovation, according to the government.
Here are a few highlights of the spending:
- $400 million to help increase venture capital investment by businesses.
- $100 million for the Business Development Bank Of Canada for venture capital investment.
- $110 million per year for the Industrial Research Assistance Program.
- $105 million over two years help pay for innovation in the forestry sector.
- $500 million over five years for the Canada Foundation for Innovations to pay for new competitions. Funding will start in 2014-15.

The government will revamp the immigration system by killing a backlog of 300,000 skilled foreign worker applicants by sending them their money and applications back. Up to $130 million will be spent refunding fees to skilled worker applicants who paid under outdated criteria.
The feds are planning to improve the system for the recognition of foreign credentials
The government will move to ensure businesses first look to domestic sources of labour before using the Temporary Foreign Worker Program.
CORRECTION: A previous version of this story stated that the budget will kill a backlog of 460,000 skilled foreign worker applicants by sending them their money back. The actual number is 300,000.
(pwenzel on Flickr)

The budget will implement the Beyond the Border security pact with the United States (The Action Plan on Perimeter Security and Economic Competitiveness and the Action Plan On Regulatory Cooperation).
But the coming changes don't mean the Canada Borders Service Agency will escape cuts. The department's budget will be reduced by $143.4 million by 2014-2015
It will also seek to streamline for the process of bringing goods home from abroad by increasing the dollar amount exempted from tariffs for travellers.
(Photo by Bill Pugliano/Getty Images)

The budget seeks to continue the government's work to expand Canada's international trading relationships.
"Our government is undertaking the most ambitious trade expansion plan in Canadian history," said Flaherty.
In his speech, Flaherty also signals that, while the U.S. will remain our largest trading partner, Canada needs to open its export economy to emerging economies. China, India and the Trans-Pacific Partnership are mentioned by name.
However, there will be cuts.
The International Assistance Envelope, which includes the Canadian International Development Agency, Foreign Affairs and International Trade Canada, the International Development Research Centre the Royal Canadian Mounted Police and Natural Resources Canada, will be cut by $377.6 million by 2014-2015.
Most of that money will come from The Canadian International Development Agency -- $319.2 million.
Foreign Affairs and International Trade Canada will be cut by $29.1 million.
The federal government also plans to find $80 million in saving by selling official residences abroad.
(Israeli Prime Minister Benjamin Netanyahu meets with Prime Minister Stephen Harper March 2, 2012 in Ottawa -- Amos Ben Gershom/GPO via Getty Images)

The budget touts the government's progress in modernizing the Canadian Forces through major investment. However, the Defence budget is about to fall substantially.
Some of this reduction will come from improvements in efficiency, but much will come from the end of the combat mission in Afghanistan.
The cuts will amount to roughly $1.12 billion by 2014-2015. According to Armine Yalnizyan, of the Canadian Centre for Policy Alternatives, these cuts are over and above the roughly half a billion announced during a previous round of strategic review.
The size of the military will not shrink but it won't grow either. The regular Canadian Forces will remain at 68,000 members and the reserve force at 27,000.
Veterans Affairs will also be on the receiving end of cuts - $66.7 million by 2014-2015.
The budget will also provide $5.2 billion for the Coast Guard over the next 11 years.
(Canadian soldiers prepare to leave Kandahar military base in southern Afghanistan on July 17, 2011 -- ROMEO GACAD/AFP/Getty Images)

The government is eliminating the Trudeau-era youth program Katimavik, as The Huffington Post Canada first reported.
The federal government says the program benefits a very small number at an excessive cost per person.
(CP photo)

The budget reduces spending on Fisheries and Oceans by $79.3 million by 2014-2015
The department will undergo a substantial restructuring. Services will be consolidated and the size of its motor vehicle fleet will be cut. It will also focus less on research, relying more on academia.
(AFP/Getty Images)

The government will spend $275 million over three years on First Nations education.
The money is budgeted for the building and renovation of schools on reserves.
Ottawa is also set to spend $27 million over two years on the Urban Aboriginal Strategy.
$330.8 million will also be provided over two years to build and expand water infrastructure on reserves.
(CP)

Coming changes to MP Pensions are not outlined in the budget. Finance Minister Jim Flaherty said the changes he wants to make, increasing pension contributions by the MPs themselves and raising the age of eligibility will have to be discussed.
(Alamy photo)

The government is making a number of changes to Employment Insurance (EI) it says are aimed at creating a more efficient program.
-$387 million over two years for matching benefit amounts to wages in different local labour markets. Depending on the unemployment rate in the region, claimants will need between 14 and 22 weeks to qualify for EI.
-$74 million over two years to help make sure claimants benefit from getting a job. EI claimants will be able to keep 50 per cent of their earnings without getting their benefits clawed back.
- Limiting premium increases to no more than 5 cents per year.
- $21 million over two years to improve the content and timeliness of information provided to job seekers.
(Alamy photo)